Home Buyers

Home Buyers, Home Tips, Inspection, Wausau, Wisconsin

Inspection Vs Appraisal – What’s the Difference?


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Inspections and Appraisals

A common question many buyers have when looking for their first home or fourteenth home is what is the difference between an inspection and an appraisal. The answer is pretty simple, yet it’s easy to get the two confused. Here’s a quick summary of the purpose of both the inspection and appraisal.

Inspection

An inspection is conducted by a state-licensed inspector, who typically spends 2 – 5 hours observing the condition of a home and formalizes the results in an inspection report. An inspection often includes a thorough analysis of the home’s condition including cosmetic blemishes and sub-surface concerns. This may include highlighting plumbing, electrical, foundation, roof, mold, and other overlooked concerns to the buyers attention. Although most inspectors are not specialized contractors, they often can identify when a concern should be further assessed by a specialized contractor, or if it is simply a cosmetic concern.

It is common for an inspector to conduct the entire inspection and then invite the buyers to the last 30-minute summary to review the findings. After reviewing the results, the inspector formalizes the information into a report that can be as short as a 1-5 pages or a short book of 50-60 pages.

The older the home is, likely, the longer the inspection report will be. As a buyer, it’s important to understand the inspector’s goal is to help educate you on the condition of the home, but not everything in the inspection report may require remediation. Talk the inspection report over with your Realtor to come up with the best strategy.

Appraisal

On the other hand, an appraisal is a third-party assessment of the home’s value. In most situations we hear the word ‘appraisal’ from our lenders / banks as it’s often a requirement for obtaining a loan. This assessment is conducted by an appraiser, who is an independent, state-specific licensed contractor.

An appraiser’s role is to determine a value evaluation of the home based on the home’s condition and comparing that to recently sold homes and currently available homes in the area. From here, the appraiser proposes a value and supporting summary of their findings in an appraisal report.

From a lender’s perspective, a third-party appraisal ensures they are making a solid loan on a home that is worth what the buyers are paying. In the event of a foreclosure, the lender can recover the amount of money loaned against the property.

From a buyer’s perspective, an appraisal gives them another value to validate the purchase price of the home. Although it does provide some information about the condition of the home, an appraisal is not often used to determine the condition details of a home. Similar to a comparative market analysis, an appraisal value can change over the years, as much of the data supporting the home’s value is based on variable market conditions.

Summary

Overall, both the inspection and appraisal are helpful in a real estate transaction. Although the nature of each home sale or purchase is vastly different, it’s best to partner with an experienced, local agent who can help you navigate each of the steps along the way.

This article was brought to you by:

Austin Solomon, Coldwell Banker Action (715) 212-4693
Schofield, WI
October 25, 2018

Home Buyers

Six Questions to Ask Next Time You’re at an Open House


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An open house is an event hosted by a real estate where they allow walk-ins to tour a home that is for sale. The real estate agent often distributes information about the home and surrounding community during the tour and gives you the opportunity to explore the home. Many searching buyers explore open houses in neighborhoods they’re interested in to get a feel for the layout and structure of the home. If you’re new at touring opens, here are some key questions to ask that will help you make the most of your visit.

How long has this home been on the market?

The amount of time a home has been on the market indicates a few key elements concerning the price and marketability. If the home was just put on the market at a lower price, that may indicate the sellers are looking to sell quickly, making it more advantageous to put in an offer quickly. If the home has been on the market for a few months, the price may not match comparable home prices, therefor, may be a bit more stagnant. In either situation, talk to your Realtor about optimizing your offer for acceptance.

How many offers have been made on this home?

The number of offers on a home may impact your strategy when making an offer. If there are one or more offers on the table, consider meeting with your Realtor to determine the best way to reach offer acceptance Don’t let other offers intimidate you. Your ability to make an offer is the same as anyone else’s. In the event there are no offers on the table, you may have a higher opportunity to purchase at a lower price point.

What year was this home constructed?

Understanding the year the home was built will give you an understanding of the age of the internal home systems including cooling, heating, plumbing, etc. Unless explicitly stated, older homes often come with the original home systems.

What is the surrounding area like?

It’s important to consider the surrounding neighborhood, crime-levels, school districts, neighboring home appearances, etc. when buying a home because these indirectly affect the value of your potential home. Your Realtor should have an understanding of the area, as well as have additional resources for you to reference that will provide additional information.

Where are the lot lines?

In many residential areas, it can be difficult to determine the lot of the home. The Realtor at the open house should be able to provide you with an estimate of the home’s lot; however, in order to get exact measurements, a certified surveyor’s opinion would be required.

What are the property taxes?

Property tax will vary based on a number of factors that may or may not be apparent after walking through an open house. Your Realtor should have the previous years property tax valuations that will give you an estimate of the annual tax amount.

Brought to you by:
Austin Solomon, Realtor | Coldwell Banker Action, Schofield, WI

Home Buyers

New Homes Vs Pre-Existing Homes… What’s the Difference?


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So, you’re thinking about buying a home in Wisconsin. One question you make ask is what’s the difference between a buying a new home and a pre-existing home, and which choice is right for me? Many homebuyers consider both options when thinking about relocating or purchasing a home. Here are a few positives of both options!

Pros of Buying a New Home 

  • Low Replacement/Repair Costs: New homes are typically move-in ready and won’t come with many home projects. You won’t find yourself spending thousands of dollars on ‘fix-it-up’ projects after you move in. This includes aspects you may not even consider, like roofs, driveways, windows, trim, etc.
  • High Energy Efficiency: Energy efficiency rules and regulations at the local, state and national level are always changing. New homes often have to meet greater energy efficiency standards than homes built in past decades. A new home may include energy efficient appliances and efficient insulation to help decrease your recurring, monthly energy expenses.
  • Safety Features: Along with increased efficiency regulations, new homes are also held to many safety standards. New homes often include added fire retardants in materials such as carpeting and insulation, providing added safety features.
  • High Resale Value: Your home won’t be considered “brand new” when you’re ready to sell; however, a home that is 5-8 years old often has a higher resale value than a home that is well-aged.

Pros of Buying a Pre-Existing Home

  • Lower Price: Pre-existing homes are often less expensive initially in comparison to a new home (especially if it is a custom project where you are required to purchase the home materials/labor, in addition to the parcel of land for building). Generally speaking, pre-existing homes are more affordable; however, the needed improvements are something to consider in addition to the price.
  • Project-Oriented: Pre-existing homes feature character and charm that may not be replicable in a new home. If you love do-it-yourself projects, a pre-existing home often offers renovation and rehab projects. These home projects are considered a hobby for many people and may increase the homes value down the road.
  • More Flexible Loan Options: Generally speaking, pre-existing homes have more flexible loan options available compared to new home purchases. Depending on the organization, a new home construction company may require a conventional loan, while pre-existing homes often accept private lending options.

As you’re thinking about buying a home, either new of pre-existing, talk with your Realtor to discuss your options. They may have additional expertise regarding the market and can help you navigate the home-buying process.

Brought to you by:
Austin Solomon, Realtor | Coldwell Banker Action, Schofield, WI

 

Home Buyers

Should I Rent or Buy?


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Relocating for work? Upsizing or downsizing? Desiring a new neighborhood/city? These are all common reasons to move. The question comes down to determining if it’s better to rent or buy. Below are a few questions you should ask yourself before starting your home or apartment search.

1. How long do I want to live here?

Determine how long you’re planning to live in the area. If you’re relocating with a company you’ve been with for many years, this may be considered a long-term move with a reliable organization. However, if you’ve just started a new job with a new company, this may be a shorter relocation period based on your performance or job satisfaction. A common rule of thumb is the three-year test. If the amount of time you’d spend in one area is three years or less, it is often better to rent. If the amount of time is over three years, it is often better to buy. This is not a golden rule that must be followed, but rather a point of reference to consider during your research. In fact, many housing situations are complex and unique in their own way. The best way to determine what is best for you is to meet with a Realtor to discuss your options.

2. How much money do I have to put down?

Consider the amount of money you’re able to allocate to a home down-payment. This is often one of the top reasons individuals chose to rent for a year or two before buying a home. The main difference between the renting and buying is not the monthly payments, but the amount of money initially due, in combination with receiving approval for a home loan. If you don’t have a down payment for your desired home’s value up-front, you may need to rent temporarily until you have the funds necessary to qualify for a loan and purchase a home. Talk to your Realtor about having them help you coordinate a meeting with a trusted loan advisor to learn about available options.

3. How invested am I in this area?

Being invested in an area may influence your decision to buy or rent a home. Do you have a particular school district your children are enrolled in? Or are you involved in a local organization or city council you are actively involved in? Many people prefer to purchase a home in an area they are involved and invested in. If you are relatively new to an area, it may be wise to look into a short-term lease while exploring different areas prior to making your home purchase.

4. How much time do I have to move?

Are you looking to move tomorrow or in the next few months? Finding a place to rent can take a few days, whereas finding a place to buy can take a few weeks or months to close. Buying requires a number of added steps including; drafting offers, negotiating, closing, and fulfilling required inspections/contingencies. If you’re on a time crunch, it may be less stressful to start out with a lease and transition to buying. You may consider a short-term lease for 6 – 9 months, giving you more time to continue your home search.

5. How many people are living with me?

Are you the only one moving? Or do you have a significant other or family members coming with you? Consider the decision from multiple points of view. If you’re a single individual, you may not be interested in the larger square footage that comes with purchasing a home. However, if you have multiple members coming with you, it’s important to consider the needs of each member including square footage and privacy.

Brought to you by:
Austin Solomon, Realtor | Coldwell Banker Action, Schofield, WI

Home Buyers

4 Reasons to Buy a Townhome


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Before we talk about 4 reasons to buy a townhome, it might be good to discuss what a townhome is. A townhome is defined as an individual house placed side by side where one or two of the walls are shared between adjacent homes. In other words, townhomes are close in proximity to other townhomes and share common walls.

Unlike a condo, where you own the inside of the home only, in a townhome you own the exterior of the house, the land, along with the interior. There are pros and cons to every form of home ownership. Read the article below to see the why many people have chosen a townhome to call their home.

1) Low Maintenance

In a townhome, you don’t have to spend the weekends checking of a list of things that need to be done around the house. You don’t need to hire landscapers or worry about the upkeep of the grounds. Most townhomes are designed to be as maintenance free as possible, allowing you to spend more time doing the things you enjoy.

2) Lower Price

Generally speaking, if a townhome and a single family home have similar specs and are relatively the same age, the townhome will have a better price. Not only is the price of the townhomes lowering cost, but the taxes for townhomes are often lower annually.

3) Low or No HOA’s

Most townhome communities are not associations, which means you do not need to pay monthly association fees. This benefit comes with the responsibility for the upkeep of the exterior. On the contrary, association fee’s required on townhomes are typically are lower because of the limited elements needed to be maintained.

4) Increased Security

The shared wall and close proximity creates a more secure neighborhood. Close neighbors can watch for suspicious activity and keep tabs on your property while you’re away at work or on a vacation.

Brought to you by:
Austin Solomon, Realtor | Coldwell Banker Action, Schofield, WI